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Business Intelligence in logistics organizations during the transformation period

January 23, 2007 | Redakcja

During the transformation period, logistics enterprises should seek sustainable sources of competitive advantage. During this time, the environment changes fundamentally, which affects the adopted strategy of market entities. Traditional relationships are being liquidated, thus creating development space for appropriately prepared entities.

It should be emphasized that traditional proposals for action, known from the economy of shortage or even the market economy, cannot be automatically adopted under transformation conditions. The goal of transformation is to reject the operating principles typical of a planned economy, and enterprises applying these principles are exposed to the loss of market share and deterioration of financial results. Consequently, they may be liquidated (Balcerowicz L. 1995). On the other hand, adopting strategies consistent with the requirements of a market economy requires a necessary level of knowledge. For this reason, the ability to acquire knowledge and use it appropriately becomes of fundamental importance.
Business Intelligence and knowledge management
The term Business Intelligence should be understood as a set of methods allowing for the optimal use of intangible resources in an enterprise. These methods are mainly based on IT applications (Zalech W. 2003). According to K. Matouk, they enable, on the one hand, a comprehensive analysis of the same problem, and on the other, allow for checking effects and flexible reaction to changes in the environment (Matouk K. 2004). A logistics enterprise functions in a network of connections with various market entities. Such a system of connections is not fully defined during the transformation period. According to the approach of K. Zimniewicz, who uses the studies of Swiss specialists P. Gomez, K. Probst, and H. Urlich, a network is defined as connections that allow for efficient distribution of goods and risk distribution (Borowiecki R., Kwieciński M. 2004).
In contrast, P. Boulanger distinguishes four types of networks based on the criterion of community of interests (Boulanger P. 1995). However, all theories refer to the principles prevailing in a market economy. Due to significant differences between a market economy and transformation, the network of connections should be identified with a system in which a logistics company:
• is able to react quickly to changes in the environment
• presents a full and optimal offer from the customer’s point of view
• achieves set goals supported by financial results.

The layout of the network of connections during the transformation period can be presented using appropriate modules. A logistics company is an integrator of relationships, in which it cooperates with a module of suppliers, producers, and wholesale and retail recipients. It is also simultaneously a coordinator of activities between distribution centers and very often takes over the tasks of logistics departments of selected enterprises. This system refers to the principles of cooperation in developed markets. The difference concerns the role of the logistics company. During the transformation period, it takes over the tasks of an integrator, an entity creating the network and having a fundamental influence on its operating principles. In a market economy, however, the role of a logistics company is reduced to serving partners, with limited influence on the network’s operating principles (Hines P. 1994). The above argument authorizes the following conclusion. A tool that meets the possibilities of creating a network and then managing it efficiently is Business Intelligence. Thanks to the use of IT applications, a logistics company is able to create databases, conduct multi-dimensional scenarios of action, analyze trends, and optimize decision-making. Traditional management, which has its genesis in the realities of a planned economy, limits the entity in its ability to acquire knowledge, and then process and use it in current operations. For this reason, an important conclusion follows for a logistics company – in order to acquire knowledge from the environment, the enterprise should create an appropriate system allowing for the generation of knowledge.

The article comes from the magazine “Logistyka”, No. 2/2005.

L2005-2s18.pdf